Economic Crime and Corporate Transparency Bill 2022

The Economic Crime and Corporate Transparency Bill was presented to Parliament by the Government on 22^nd September 2022 and will go for its second reading at the House of Commons on 13^th October. It aims to build on the Economic Crime (Transparency and Enforcement) Act 2022 (ETCE), which was introduced earlier this year.

This economic crime Bill includes the largest reforms to Companies House in 170 years alongside increased powers to law enforcement agencies and stronger anti-money laundering powers.

You can learn more about the process and stages of money laundering on our blog.

Suella Braverman, Home Secretary, commented, “through this Bill we are giving our law enforcement agencies greater powers and intelligence capabilities to stay one step ahead of the criminals intent on keeping their corrupt assets out of reach.”

What Is the Economic Crime and Corporate Transparency Bill?

Aims

The key aim of the economic crime Bill is to drive out illegally-gained wealth from out of the UK and ensure that legitimate businesses can flourish. In the words of Jacob Rees-Mogg, Business Secretary, the Bill will “root out criminals attempting to hide their activities without burdening law-abiding companies with unnecessary bureaucracy”.

Additionally, the economic crime Bill will aim to:

• Protect small business owners, consumers and the general public from the fraudulent use of their personal information;
• Identify and protect against economic crimes by making it easier for businesses and law enforcement agencies to share information about suspicious activity or potential infringements proactively;
• Prevent limited partnerships from being used for money laundering or other illicit means.

How will the economic crime Bill achieve these aims?

The Economic Crime and Corporate Transparency Bill will introduce reforms to Companies House and new or stronger powers for law enforcement agencies to investigate and act on illicit activities. Some of the proposed changes include:

• Improvements to the companies register, such as identity verification checks for new and existing company directors, People with Significant Control and those who deliver documents to the Registrar, and improving the financial information held on the register to reflect up-to-date technological advancements.
• Broader powers for Companies House and its Registrar, providing a much more effective ability to investigate wrongdoing through data sharing and gatekeeping of company creation and data. The Registrar will also have more extensive legal gateways for data sharing with law enforcement, other government bodies and the private sector, to ensure more efficient sharing of suspicious activity with law enforcement.
• New powers to check, remove or decline information submitted to or already on the register.
• Increased and refined registration and transparency requirements for limited partnerships and permitting the Registrar to deregister limited partnerships where they are dissolved or no longer carrying on business.
• Additional powers for law enforcement to seize and recover cryptoassets that are associated with illegal activity by amending criminal confiscation powers contained within Parts 2, 3 and 4 of Proceeds of Crime Act. The reforms will enable officers to seize cryptoassets during the course of an investigation without first having arrested someone for an offence.
• The provisions will make it easier for businesses to share information about their customers with each other for the purpose of preventing, investigating and detecting economic crime. Civil liability for breach of confidentiality in these limited circumstances will be disapplied.
• Removing the need to submit a preceding Suspicious Activity Report before gaining an Information Order to assist with gathering intelligence related to money laundering or terrorist financing.

Economic Crime (Transparency and Enforcement) Act 2022

This Act was brought in quickly in March 2022, in response to the Russian invasion of Ukraine. The British Government wanted to come down fast on dirty Russian money in the UK and so introduced several changes rapidly.

Essentially, the Act created a Register of Overseas Entities requiring overseas entities who own land to register in certain circumstances and reformed the UK’s Unexplained Wealth Order legislation to bolster investigations by law enforcement bodies. It also allowed the government to impose sanctions more quickly and strictly.

The Economic Crime and Corporate Transparency Bill is following up from this Act, bringing in broader reforms to tackle economic crimes and crack down on kleptocrats, fraudsters and terrorist financing.

If you would like to discuss the proposed changes in the Economic Crime and Corporate Transparency Bill, or if you have been involved in financial crime and would like to instruct an expert financial crimes barrister, please do not hesitate to contact St Pauls Chambers today.